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In the 1970s, U.S. college students waged a campaign against apartheid, demanding that their schools divest themselves of stocks in companies doing business in South Africa. Some students today, led by environmental activist Bill McKibben, are demanding that colleges and universities, as well as public pension funds, rid themselves of holdings in oil, gas, and coal companies.
In recent weeks, McKibben has sponsored rallies in Maine, Massachusetts, Minnesota, Pennsylvania, and Washington State to make his case for weaning America off hydrocarbons that, according to him, are destroying the planet by contributing to global warming.
The movement has already won some converts. Unity College in Maine and Hampshire College in Massachusetts have signed on to the “fossil free campus divestment movement” while the mayor of Seattle has proposed divesting that city’s pension plan from fossil fuels. In a recent vote, 72% of Harvard undergraduates supported a resolution asking the school to sell all of the oil, gas, and coal company stocks in the university’s $31 billion endowment.
McKibben isn’t the first pundit to demonize fossil fuels. But he goes further by not only characterizing oil, gas, and coal as “rogue industries,” but by also advocating for political action against fossil fuels companies through civil disobedience.
Apparently McKibben and his acolytes are unaware that greenhouse gas emissions (GHGs), the alleged culprit behind global warming, have been dropping in the U.S. for years. In fact GHG emissions are lower today than they were 20 years ago. Put differently, though the United States did not sign the Kyoto Protocol, it has exceeded the emissions reductions mandated by that agreement. This decline has not occurred because of “clean energy’s” contribution to the nation’s power mix; renewable energy today accounts for less than 5% of the country’s electricity generation capacity nationwide. Rather, most of the credit goes to a plentiful, domestic, fossil fuel called “natural gas.”
Since 2005, 8,000 megawatts of coal-fired generation have been retired and another 15,000 megawatts will be off-line by 2016. These coal plants are being replaced primarily by natural gas which has a “carbon footprint” about half that of coal. Whereas 45% of America’s electricity was generated by coal in 2005, by 2016 coal will account for less than 30%, with natural gas taking up the slack. The result will be even lower carbon emissions.
What’s more, the newfound abundance of natural gas, primarily from shale plays like the Barnett in Texas and the Marcellus in the Northeast, has pushed down prices to near-record lows. Lower natural gas prices, in turn, have been like a tax cut for millions of households and businesses that are served by utilities burning natural gas to generate power or supplying natural gas for home heating. Abundant and affordable natural gas is also inducing a rapid shift away from expensive fuel oil in the Northeast, saving companies and households hundreds of dollars every winter while at the same time improving the air quality in these states.
Furthermore, low-cost natural gas is improving the competitiveness of America’s manufacturing sector. For example, natural gas, and natural gas liquids such as propane, butane, and pentane are the primary inputs used by the petrochemical industry which makes the building blocks for plastics, pharmaceuticals, and many other products. Whereas a decade ago the U.S. was a net importer of petrochemicals, thanks to the shale gas revolution it is once again a net exporter of petrochemicals, which means more American jobs and a lower trade deficit.
It’s time for Bill McKibben and other environmental extremists to acknowledge that renewable energy sources such as wind, solar, and biomass, even when combined with efficiency and conservation in our use of energy, cannot supply the power needs of a growing economy. They should also recognize that not all fossil fuels are created equal and that greater use of abundant, domestic natural gas can help improve air quality while reducing power costs and making America’s manufacturing industries more competitive.
Bernard L. Weinstein is Associate Director of the Maguire Energy Institute and an Adjunct Professor of Business Economics in the Cox School of Business at Southern Methodist University. He has taught at Rensselaer Polytechnic Institute, the State University of New York, the University of Texas at Dallas, and the University of North Texas. He has authored or co-authored numerous books, monographs, and articles on the subjects of economic development, energy security, public policy, and taxation. His work has appeared in professional journals as well as the popular press. He earned an A.B. degree from Dartmouth College and an M.A. and a Ph.D. in economics from Columbia University.Full Bio